The experiments of this proposal are designed to understand how the eye and the forebrain from which it emerges are formed and patterned during embryonic development. We will analyze the role that two nuclear proteins - Vax1 and Vax2 - play in the specification of dorsal-ventral (top-bottom) position in the developing eye and forebrain. These transcription factors are induced in the anterior forebrain by Sonic hedgehog, a potent polarizing 'morphogen' that is ventrally expressed throughout the embryonic nervous system. We have discovered that the Vax proteins activate the expression of a gene - designated dnTcf7l2 - that acts as a strong antagonist of the Wnt proteins - a group of dorsal morphogens that normally oppose Sonic hedgehog. We will use genetic methods in frog and mouse embryos to assess the role the dnTcf7l2 plays in eye and forebrain development. We will use genetic and biochemical methods to identify the proteins that normally cooperate with the Vax proteins to regulate dnTcf7l2, and we will use high-throughput genome-wide screening assays to identify proteins that bind to the dnTcf7l2 regulatory region and activate its transcription. We already have two strong indications that dnTcf7l2 regulation and activity are important. First, the dnTcf7l2 regulatory region is among the most highly conserved DNA segments - as monitored by sequence change across vertebrate evolution - in the entire human genome. Second, frog embryos in which dnTcf7l2 activity is ablated from the beginning of embryogenesis lack both eyes and forebrains. These studies hold the promise of revealing fundamental new principles in the axial patterning of the nervous system.